Bill to wind down Fannie, Freddie to be released

WASHINGTON (MarketWatch) -- A Senate bill draft to reform the U.S. housing-finance system and wind down federally controlled mortgage buyers Fannie Mae
FNMA, -2.52%
and Freddie Mac
FMCC, -3.48%
will be released in coming days, bipartisan leaders of the Senate Banking Committee said Tuesday. In addition to eliminating Fannie and Freddie, the bill would establish a new agency to provide a financial backstop when mortgage securities go bad, but only after private funds take losses first. Details will be publicly released in coming days, and U.S. lawmakers will have a chance to revise the bill in coming weeks, officials said. "This agreement moves us closer to ending the five-year status quo and beginning the wind down of Fannie and Freddie while protecting taxpayers with strong private capital, building the components for a stable secondary market and avoiding repeating the mistakes of the past," said Sen. Mike Crapo of Idaho, the leading Republican on the banking committee. Fannie Mae and Freddie Mac have been in conservatorship for more than five years. The soon-to-be-released bill will use a prior housing -finance-reform plan from Sens. Bob Corker, a Republican of Tennessee, and Mark Warner, a Democrat of Virginia, as the base text.

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